Blast’s dependence on MakerDAO could lead to ‘significant financial issues,’ Resonance cautions

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As a crypto investor with a background in cybersecurity, I find the concerns raised by Grace Dees at Resonance Security about Blast’s reliance on third-party decentralized finance protocols for generating yield to be quite alarming. The potential compromise of these external pools or protocols could put Blast users’ associated tokens at risk.

If the security of yield-generating pools or protocols on Lido or MakerDAO is breached, the tokens linked to Blast users in these pools are at risk of being affected and potentially lost.

As a crypto investor, I’ve come across concerns raised by cybersecurity experts at Resonance Security regarding Blast’s heavy dependence on third-party decentralized finance (DeFi) protocols. While the use of these protocols can offer benefits such as increased interoperability and access to various DeFi applications, it also introduces potential risks. The security team at Resonance Security is urging caution, emphasizing that each integrated protocol comes with its own set of vulnerabilities and risks, which Blast users should be aware of. It’s essential for investors like myself to stay informed about these developments and assess the impact on our investments accordingly.

In her blog post published on Thursday, cybersecurity analyst Grace Dees from Resonance Security highlighted the potential risks associated with Blast’s reliance on external protocols for generating yields. Specifically, she called attention to MakerDAO, which provides a 5% yield for USDB holders, and mentioned that this organization has not released a security audit of their smart contracts in the past three years.

“Warning from the analyst: If the yield-generating pools or protocols linked to Lido or MakerDAO experience security breaches, the corresponding tokens held by Blast users in those pools will be at risk. Dees added that while relying on third-party integrations is not inherently problematic, she highlighted that some of MakerDAO’s latest public audits date back as far as five years.”

As a crypto investor, I’ve come to realize that the security of smart contracts is an ongoing concern. New vulnerabilities can surface over time, putting our investments at risk. That’s why it’s essential for us to regularly audit these contracts to stay ahead of any potential threats and safeguard our investments.

“Regarding Blast’s security, issues go beyond just third-party dependencies. Specifically, Dees highlighted problems with the LaunchBridge contract, which he described as a “custodial contract secured by a 3/5 multi-signature address,” instead of a rollup bridge.

As a researcher, I can’t stress enough the significance of implementing strong security measures in any system or platform, including regular audits and bug bounty programs. Although MakerDAO hasn’t publicly disclosed their most recent security audit, they have an active bug bounty program through ImmuneFi to help identify and address any vulnerabilities in their smart contracts. Dees acknowledged this approach as a crucial step towards ensuring the security of their decentralized finance protocol.

As a researcher focusing on cybersecurity best practices, I would recommend that Blast, in order to minimize risks associated with third parties, prioritizes building strong partnerships for the development and upholding of robust security standards. This collaborative approach can save projects from potential headaches in the future.

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2024-06-27 17:32